Krugman on American healthcare and the unfair TeaParty movement

OP-ED COLUMNIST
Credibility, Chutzpah and Debt
By PAUL KRUGMAN
Publishedin the NY Times: August 7, 2011
Source

To understand the furor over the decision by Standard & Poor’s, the rating agency, to downgrade U.S. government debt, you have to hold in your mind two seemingly (but not actually) contradictory ideas. The first is that America is indeed no longer the stable, reliable country it once was. The second is that S.& P. itself has even lower credibility; it’s the last place anyone should turn for judgments about our nation’s prospects.

Let’s start with S.& P.’s lack of credibility. If there’s a single word that best describes the rating agency’s decision to downgrade America, it’s chutzpah — traditionally defined by the example of the young man who kills his parents, then pleads for mercy because he’s an orphan.

America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis. And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.

Nor did the bad judgment stop there. Notoriously, S.& P. gave Lehman Brothers, whose collapse triggered a global panic, an A rating right up to the month of its demise. And how did the rating agency react after this A-rated firm went bankrupt? By issuing a report denying that it had done anything wrong.

So these people are now pronouncing on the creditworthiness of the United States of America?

Wait, it gets better. Before downgrading U.S. debt, S.& P. sent a preliminary draft of its press release to the U.S. Treasury. Officials there quickly spotted a $2 trillion error in S.& P.’s calculations. And the error was the kind of thing any budget expert should have gotten right. After discussion, S.& P. conceded that it was wrong — and downgraded America anyway, after removing some of the economic analysis from its report.

As I’ll explain in a minute, such budget estimates shouldn’t be given much weight in any case. But the episode hardly inspires confidence in S.& P.’s judgment.

More broadly, the rating agencies have never given us any reason to take their judgments about national solvency seriously. It’s true that defaulting nations were generally downgraded before the event. But in such cases the rating agencies were just following the markets, which had already turned on these problem debtors.

And in those rare cases where rating agencies have downgraded countries that, like America now, still had the confidence of investors, they have consistently been wrong. Consider, in particular, the case of Japan, which S.& P. downgraded back in 2002. Well, nine years later Japan is still able to borrow freely and cheaply. As of Friday, in fact, the interest rate on Japanese 10-year bonds was just 1 percent.

So there is no reason to take Friday’s downgrade of America seriously. These are the last people whose judgment we should trust.

And yet America does have big problems.

These problems have very little to do with short-term or even medium-term budget arithmetic. The U.S. government is having no trouble borrowing to cover its current deficit. It’s true that we’re building up debt, on which we’ll eventually have to pay interest. But if you actually do the math, instead of intoning big numbers in your best Dr. Evil voice, you discover that even very large deficits over the next few years will have remarkably little impact on U.S. fiscal sustainability.

No, what makes America look unreliable isn’t budget math, it’s politics. And please, let’s not have the usual declarations that both sides are at fault. Our problems are almost entirely one-sided — specifically, they’re caused by the rise of an extremist right that is prepared to create repeated crises rather than give an inch on its demands.

The truth is that as far as the straight economics goes, America’s long-run fiscal problems shouldn’t be all that hard to fix. It’s true that an aging population and rising health care costs will, under current policies, push spending up faster than tax receipts. But the United States has far higher health costs than any other advanced country, and very low taxes by international standards. If we could move even part way toward international norms on both these fronts, our budget problems would be solved.

So why can’t we do that? Because we have a powerful political movement in this country that screamed “death panels” in the face of modest efforts to use Medicare funds more effectively, and preferred to risk financial catastrophe rather than agree to even a penny in additional revenues.

The real question facing America, even in purely fiscal terms, isn’t whether we’ll trim a trillion here or a trillion there from deficits. It is whether the extremists now blocking any kind of responsible policy can be defeated and marginalized.

A version of this op-ed appeared in print on August 8, 2011, on page A19 of the New York edition with the headline: Credibility, Chutzpah And Debt.

Hitler, Bush, Chomsky and Plato

On Hitler and Bush, Plato once said: “Tyranny naturally arises out of democracy.” Therefore, what democracy needs is an eye of vigilance of checks and balances to prevent tyranny from bubbling up. Ad Hitlerum fallacies as found in Alex Jones’ inside job conspiracy theories, as found on Diggnation and committed by Chomsky’s slave moralists prevent the elite from transforming into a police state and carrying out false flag attacks to advance violent imperial ambitions for oil. I suppose without prosperity, in the event of economic, environmental, political, public health crises, capitalism can’t possibly remain democratic. Thus, Plato’s quote should read for 21st century scholars: “Tyranny naturally arises out of democracy especially when the economy is no longer viable.” The iPod generation over the next 30 years will spontaneously create an AIDS vaccine, create a new sustainable energy source, structurally adjust capitalism to make it more sustainably functional, and discover themselves spiritually, returning to the geocentric paradigm. I’ve seen it.

Feyzi Baban’s (2006), “Living with Difference: Cosmopolitanism, Modernity, and Political Community"

Here are some quotes and corresponding footnotes I have copied and pasted from Feyzi Baban’s (2006), “Living with Difference: Cosmopolitanism, Modernity, and PoliticalCommunity,” Studies in Political Economy 77 (spring): pp. 107-128.

cosmopolitan thinking encourages us to rethink how sameness and difference is dealt with in a highly complex globalized world.5 In a series of well articulated books and articles, Held and Archibugi have been defining the blueprint for a world polity that needs to be reimagined outside the scope of state sovereignty.⁶

6. D. Archibugi and D. Held, Cosmopolitan Democracy: An Agenda for a New World Order (Cambridge: Polity Press, 1995); D. Archibugi and D. Held, (eds.), Re-imagining Political Community: Studies in Cosmopolitan Democracy (Cambridge: Polity Press, 1998); D. Held, Global Transformations: Politics, Economics and Culture (Stanford: Stanford University Press, 1999); D. Held, Globalization-anti-globalization (Cambridge: Polity, 2002); D. Archibugi, (ed.), Debating Cosmopolitics (London: Verso, 2003).

Central to these and other works explaining the “cosmopolitan condition” is the need to redefine world politics that cannot be managed by states alone. Held argues that, as a result of the growing number of complex global issues. such as regulation of trade, poverty, and the environment, we can no longer sustain the assumption that nations can control their own destinies alone. He then asserts that, as a result, we either leave our destiny at the hands of the market or try to create new forms of democracy, regulation, and accountability to subject global forces to effective political control.⁷

7. M. Guibernau, “Globalization, Cosmopolitanism, and Democracy: An Interview with David Held,” Constellations 8/4 (2001), pp. 427–41.

Proponents of cosmopolitan theory remind us that we need to reimagine a political community that is not bounded by borders, one that would include all human beings as its members and adopt democracy as a cosmopolitan ideal implemented on a global level.⁸

8. D. Held, “Globalization and Cosmopolitan Democracy,” Peace Review 9/3 (1997), pp. 309–14.

This cosmopolitan democratic ideal requires a paradigm shift in international relations and should base itself not on international law, but on cosmopolitan law that “would guarantee the fundamental rights of every individual human being whether or not such rights were respected by their ‘own’ nation-states.”⁹

9. R. Fine and R. Cohen, “Four Cosmopolitanism Moments,” Conceiving Cosmopolitanism, (eds.), S. Vertovec and R. Cohen (New York: Oxford University Press, 2002), pp. 137–62.

This shift entails removing nation-states from their privileged status in international politics and extends the concept of sovereignty to individuals who would be the legitimate agents of the international domain.¹⁰

10. D. Archibugi, “Principles of Cosmopolitan Democracy,” Re-imagining Political Community, (eds.), D. Archibugi, D. Held, and M. Kohler (Stanford: Stanford University Press, 1998), pp. 198–230.

Laying the groundwork for democratic global order is one of the principal objectives of cosmopolitan theorizing.(110)

...cosmopolitanism should be imagined and read within the context of margins, local experiences, and cultures.(109)

Hope for the environment + humanity

I downloaded an episode of the Colbert Report from October 30. The guest, America biologist and business man Craig Venter, explained that he and his team of scientists can create life forms that generate energy, clean water, and food. Here is a quote from Venter's Wikipeida entry:

In a recent interview with New Scientist when asked 'Assuming you can make synthetic bacteria, what will you do with them?' Venter replied

'Over the next 20 years, synthetic genomics is going to become the standard for making anything. The chemical industry will depend on it. Hopefully, a large part of the energy industry will depend on it. We really need to find an alternative to taking carbon out of the ground, burning it, and putting it into the atmosphere. That is the single biggest contribution I could make.'

Furthermore it suggests that one of the main purposes for creating synthetic bacteria would be to reduce the dependence on fossil fuels. (Source: New Scientist Issue 2626 Pg 57.)

Pretty good, eh?

Blogger Direct-Action Day: The Environment and Sustainability

To celebrate blogger action day, here is a random clip about how the media mistreats Britney Spears:
All jokes aside, politicians and world leaders should embrace public policies which are environmentally sustainable. Public intellectual David Suzuki depicts a bleak picture for humanity's future if we don't adapt: